How to Start a Fleet Management Company and Make Money
Do you want to start a fleet management company but don’t quite know where to start? Or do you already have the basics down—building and operating a small fleet—and you just need to know the next step?
Dive into this in-depth explanation of all the I’s you need to dot and the T’s you need to cross to get your fleet management company off the ground.
Beginners guide to understanding fleet management companies
Whether it’s a fleet of trucks for deliveries or tractors for farm use, managing a fleet is a skill every manager exercises. Fleet management involves managing and tracking vehicles from their safety to their maintenance needs, overlooking cars, vans, trucks, or whatever type of wheels you’ve got.
This is used in various industries, including logistics, transportation and delivery services. Basically, if there’s more than one vehicle in a business, managers can use fleet management practices and software like Cartrack to optimise their fleet, improve fleet health, increase fleet productivity—you name it—and fleet management can strive to assist you.
Now, instead of relying on external management methods and techniques, how about using the services of a fleet management company? Better yet, imagine you own that fleet management company.
How are you going to steer your fleet in the right direction?
How can my fleet management company make money?
Before you even start your business planning, many owners have the burning question, ‘Will my business even make money?’. To save time and manage your expectations, calculating how profitable your company will become is a smart step to take.
Often enough, with a well-thought-out plan for your business and a trusty fleet management system to boot, there’s a high chance your business will be successful and, yes, profitable.
The fleet management market is a pretty lucrative industry worth around $28.6 billion in 2023. The market is estimated to reach an astounding $55.6 billion by 2028. This huge number has brought many entrepreneurs to look towards fleet management and be part of its success, and honestly, who can blame them? It’s becoming such a popular venture.
Step-by-step guide to a successful fleet management company
So, first things first: How do you start your fleet management company?
Depending on who you ask, you might get different answers to how you can get your business off the ground. What the many pieces of advice will all have in common are these essential steps that every business owner takes to build their company.
Here’s a roadmap to get your business started.
Step 1. Identify your target market and do market research
Before diving in, do some research to understand the needs, preferences, and pain points of different fleet sectors. This will help you find the gap in the market for your business; or, when offering your services, it will help you tailor your business to meet their demands.
You need to know who you’ll be serving; small businesses, large corporations, or maybe specialised industries like logistics or transportation. The better you understand your market, the quicker you’ll thrive in the industry.
Step 2. Create a business plan
Think of your business plan as a roadmap for success. Outline your business goals, strategies for achieving them, and how you’ll differentiate yourself from the competition. Include details about your services, target market, marketing plan, and financial projections.
A solid business plan will guide you through the startup phase and attract investors or lenders, if needed.
Step 3. Get to know the finance
Being financially smart goes a long way when owning a business. Figure out how much capital you’ll need to get your business going.
Consider expenses like:
- Vehicle purchases or leases
- Insurance
- Software subscriptions
- Marketing costs
- Operational expenses
Explore funding options such as personal savings, loans, or investors. Keeping a close eye on your finances from the get-go will set you up for financial success down the road.
Step 4. Sort business legalities
Don’t forget the legal stuff. Register your business and obtain any necessary licences or permits. Decide on your business structure (e.g., sole proprietorship, partnership, etc.) and consult with a legal professional to ensure compliance with local regulations.
Taking care of legal matters early on will prevent headaches later and ensure your business operates smoothly and legally.
Step 5. Build your team: Suppliers & service providers, employees, drivers and vehicles
Your team is the backbone of your business. Start by establishing relationships with reliable suppliers and service providers for vehicle maintenance, fuel, and other essential services.
Hire skilled employees to handle administrative tasks, customer service, and sales. Recruit experienced drivers who prioritise safety and professionalism. And, of course, acquire the vehicles you need to kickstart your fleet. Keep in mind the type of business you have, as this might influence the type of vehicles you need.
Step 6. Market your services
Time to spread the word!
Develop a marketing strategy to showcase your services to potential clients. This could include creating a professional website, leveraging social media platforms, attending industry events, and networking with local businesses. Highlight your unique selling points and the benefits of partnering with your fleet management company.
The goal is to attract and retain clients who see the value in what you offer.
Step 7. Choose a trusted fleet management software like Cartrack
Invest in the right tools for the job. Choose a reliable fleet management software, like Cartrack, that suits your specific business needs.
Our software works as your trusty sidekick, helping you track vehicles, monitor driver behaviour, optimise routes, and manage maintenance schedules. With Cartrack by your side, you can do this and more by taking advantage of its many smart features, including:
- Delivery, for efficient task management
- Mifleet, for staying on top of fleet costs
- Predictive maintenance for a healthy fleet
With the right software, you’ll have the insights and control you need to run your fleet management company efficiently and effectively.
What do fleet management companies do?
Fleet management companies take the concept of using fleet management software and run with it as their business model. They are experts in everything fleet management, offering a range of services one would usually do alone with the help of a fleet management system.
The difference between using the services and using fleet management software lies in the simplicity, reliability, ease and these valuable benefits:
- Minimise labour and fuel expenditures
- Ensure compliance with set regulations
- Track and locate fleet vehicles
- Manage vehicle maintenance
- Enhance fleet and driver safety
- Optimise cost-saving
When it comes to their own fleet, fleet management companies essentially become both the service provider and the client. They handle everything, including vehicle acquisitions, driver training, behaviour monitoring and fleet operations.
Fleet management companies that offer their services to other companies are seen as the jacks of all trades and masters of all. When you team up with a fleet management company, you get access to the fleet experience that can be used to help your business tackle any issues, fleet technology and software platforms that deliver vehicle data, fleet reporting, cost management, etc., all on a silver platter, right to your inbox.
These companies take the headache out of doing it all yourself, leaving managers time to focus on their business and efficiently operate it.
Types of fleet businesses: Find the right one for you
There are various industries a fleet management company can fit into, and many don’t require much to get started.
Here is a list of a few fleet businesses that you can mould your own company to take after. In the world of fleet management, there is no shortage of niches to operate in, you just have to find one that fits your company.
- Logistics and distribution
These are trucking companies, courier services, or delivery fleets that deliver goods and all types of cargo, from food, pharmaceuticals, clothes, gadgets, or natural materials (coal, sand, cement, etc.), from one location to another.
For this type of industry, you would focus on route optimisation, fuel management, driver safety and complying with the rules set for transporting certain materials. As a plus, add extra industry-specific products such as temperature control or cement rotation sensors to stand out.
- Construction fleet management
Construction companies use heavy machinery and vehicles like bulldozers, excavators, cranes and dump trucks in construction projects. These vehicles are often expensive to acquire and need drivers who are certified to operate them, you would need to include this in your budget).
Vehicle maintenance and tracking equipment are high priorities in this industry, as breakdowns and equipment downtime can be very costly.
- Passenger transportation
This is similar to logistics, but instead, you transport passengers. These are taxis, buses, and ride-hailing services. For this business, a sizable fleet is usually needed to maximise use and profits.
Since you’ll be working closely with people, safety comes first. Drivers will be closely monitored to ensure they follow the rules of the road and real-time vehicle tracking can be used for efficient tracking and ensuring drivers are on schedule.
- Rentals and leasing fleets
In this industry, you rent or lease out your vehicles to other businesses or individuals for long or short-term use. For your business to be successful, you need to have a wide variety of vehicles in your inventory, including cars, trucks, vans and perhaps even luxury vehicles for special event leasing.
With many clients using your vehicles, you must keep track of contracts and usage rates, so every hour is accounted for in invoices, and consider performing timely maintenance to preserve the health of your vehicles.
Every fleet comes with its own challenges and opportunities. By carefully considering these factors, you can make an informed decision. Just remember, there’s no one-size-fits-all answer. The best niche for your company depends on your strengths, resources, and your goals.
What solutions do fleet management companies offer?
With many fleet management companies to choose from, your company has to stand out in the crowd and offer more than just knowing the locations of your vehicles.
The range of services can be tailored to the specific needs of businesses.
Their services include:
- Telematics and vehicle tracking
Fleet management companies use tech like GPS trackers to keep an eye on where your vehicles are, and how your drivers are driving, and gather other important information like fuel usage and mileage in real-time. It’s super handy if your company doesn’t just want to keep tabs on their vehicles but also on how they are being driven, and driver behaviour during deliveries.
- Fleet maintenance
Find it tricky remembering which vehicles in your fleet need a checkup or some repairs? Fleet maintenance services will do all the remembering for you, and ensure your vehicles get their scheduled maintenance TLC, so you don’t end up missing appointments or your drivers facing unexpected breakdowns.
- Route optimisation
Route optimisation software takes into account traffic, road conditions, and delivery schedules to map out the most efficient routes for your vehicles. Without this, businesses might struggle to keep to their delivery schedules or service calls, resulting in wasted time, fuel, and resources on inefficient roads or unnecessary detours.
- Driver safety
Safety first, right? Fleet management companies offer all sorts of solutions, like driver training, dash cams, and safety alerts, to help your drivers stay on the safe side of the road. These are available to help businesses improve driver behaviour, reduce accidents, lower insurance premiums, and decrease the downtime of damaged vehicles.
This service is needed for businesses that wish to reduce accidents, speeding concerns, driver injuries, or simply want to improve company reputation if their drivers are known for risky driving.
- Fuel management
One of the biggest headaches for fleet businesses is managing fuel consumption and fuel costs in their fleet. As a solution, fleet management companies provide tools and systems to lessen this stress. From monitoring fuel consumption to suggesting fuel-saving strategies, they’ve got your back when it comes to cutting down on fuel expenses and being kinder to the environment.
- Compliance and regulations
Nobody wants to get in trouble with the law, so fleet management companies make sure your vehicles and drivers are always compliant, so you can avoid costly fines and legal headaches.
- Fleet analytics and reporting Fleet management companies offer smart tools and dashboards to help business owners or managers stay knowledgeable about their fleet. These tools help you spot trends, make informed decisions about your operations, and better understand your fleet. It’s like having your own fleet guru who gives you all the juicy insights you need to keep things running smoothly.
Improve your fleet business with Cartrack Nigeria
Cartrack is a trusted vehicle tracking fleet management company for over 115 businesses worldwide. Their smart features and services are there to help you master managing your fleet, whether you want to grow your fleet visibility or improve driver safety.
Cartrack has all the tools a fleet management company needs to thrive.
This video shows how a fleet business can use Cartrack to tackle task management, safety, vehicle maintenance, admin and fuel monitoring. No matter the challenges your fleet faces, Cartrack can be tailored to your business model and offer solutions that will work for you.
